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Re: RE: [sharechat] Property Vs Shares


From: "Neil Moros" <morosnz8@ihug.co.nz>
Date: Tue, 26 Jun 2001 21:04:16 +1200


Chris
 
I agree, property tax does no one any good except those receiving it.   From mail I have seen a number are confusing the property tax with Capital gains tax.   Correct me if I am wrong but as I understand it they are two separate beasts that both need to be slain. 
----- Original Message -----
Sent: Sunday, 24 June 2001 4:05 PM
Subject: Re: RE: [sharechat] Property Vs Shares

MY REINZ statistics show NZ median house sale prices of $162,000 for January 1998 and $178,000 for April �01 (I don�t have May�s figure), which I would say more accurately reflect house prices than David Mitchell�s figures (in spite of his commendably literate submission). More to the point, returns since 1989 based on REINZ figures give a 3.4% annual increase, and 12-month rolling average increases declining at 0.1%/month. At 1.1% in April, if this continues they�ll flatline this time next year.

I anticipated this in 1995, got completely out of property and managed a 13% pa return over a diverse portfolio. This was possible because rents are increasing an even lower rate than property values - the demand isn't there. I expected the baby-boom phenomenon (of large numbers of retirees stopping investing and reducing consumption, and drawing down on investments so causing a long-term bear market) to occur from about 2010. But recent market movements lead me to believe that the process has started and a market recovery won�t occur for many years.

Look between the lines of this taxation report. Taxing property? A horrifying thought. How much more reasonable an increase in GST and reduction in personal income tax seems! Not to mention regressive, poverty-enhancing, rich-enriching, society-warping, or infrastructure-damaging. Roger Douglas never mentioned that either but still it happened. The twisted self-serving logic of the new right that says less tax means more prosperity hasn�t yet been exorcised despite evidence to the contrary. This review continues the destructive Douglas theme, and his Trojan Horses in the Labour Party can�t wait to implement the less controversial aspects of it. This country's social statistics will steadily sink to mid-third-world status and its social divisions deteriorate, and still Douglasites will see salvation in lower personal and company taxes.

Chris Slater

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